Analysis of Caterpillar Inc.
1925 Daniel Best and Benjamin Holt form Caterpillar.1950 Company begins international expansion with the establishment of Caterpillar 1953 Company solidifies its commitment to engine market with creation of separate division for engine production.1970s Company introduces a broad range of new products that would become the forerunners of today's best-selling product lines.1987 $ 1.8 billion plant modernization program launched.1990s CAT reorganizes into closer-to-the-customer business units. Profits top 1 billion for the first time ever in 1995. Sales double over six year period from 93-98 where profits hit consecutive record highs for five years (93-97). Caterpillar Inc is headquartered in Peoria, Illinois and is the worlds leading manufacturer of diesel and natural gas engines, construction and mining equipment and industrial gas turbines. Caterpillar is a fortune 50 company that employs 65,824 people and is one of only a handful of companies that leads its industry while competing globally from a primarily domestic home base. Since Cat is the leading U.S. exporter, with 1998 export sales of $6 billion, it records nearly half
4) Suppliers- The power of suppliers in this industry is very significant. 5) Buyers- The bargaining power of buyers in this industry is also a significant factor. 6 billion compact machine industry is growing at 11 percent a year and represents an opportunity for Cat to expand its customer base. New Products Engines: To meet the worlds growing demand for new ways to provide power, Cat's engine business is expanding its capabilities in electric power generation, and fueled systems. To accomplish this, the company has made it their primary mission to increase the quality of their products and to remain at the forefront of innovation. Five Forces Analysis 1) Competition- Rivalry among competitors in the construction & agricultural machinery industry is very high. If exchange rates raise and stay at high levels for extended periods of time, company export sales would be reduced. To enhance versatility these products came with the ability to use 60 different work tools. New Markets Currently 81 percent of the people in the world today live in developing countries, where there is limited access to water, electricity and transportation. The strategy that Cat is using to accomplish these goals is one that emphasizes vertical integration within its product markets. Although, this could be offset by the highway sector as states fuel their highway construction with tax surpluses. Cat's goal, like any other corporation, is to increase shareholder wealth.
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